Creating A Profitable Journalism Industry in a Digital Age

The journalism industry has changed, but a few have learned the new ways of how to remain profitable.

AOL‘s acquisition of the Huffington Post at Superbowl XLV gave Tim Armstrong and Arianna Huffington a reason to celebrate even if they aren’t Packers fans.  As newspapers around the country are crumbling they are part of a very small few who have found a way of making journalism in a digital age financially sustainable.  The most interesting thing about the acquisition of the Huffington Post isn’t that the blog was sold for $315 million, or even that it took Arianna and team only six years to grow the Huffington Post to  generate up to 26 million unique monthly views.  What’s so interesting is the current state of the journalism industry.

A large part of why the Huffington Post has so many loyal readers is because of the several thousand contributors including politicians, business leaders, entertainers, and bloggers from every imaginable niche writing cause and effect essay topics, their thoughts and opinions for the online newspaper.  What’s so interesting is that while these contributors add so much value to Huffington Post readers, they are not financially compensated for the articles they write.  So what is keeping these bloggers from writing on their own sites instead of the Huffington Post, especially in the 21st century where there are absolutely no barriers for anyone to start their own blog?  I’m sure they would love to have a site valued at millions of dollars as well.  So what do they need from the Huffington Post?

The answer is readers.  While it’s true that anyone can simply start their own blog, the more difficult task is gaining a loyal following of readers.  In return for writing the articles, The Huffington Post pays their authors with exposure by giving them a platform to reach the audience which they have garnered over the past six years.  They have optimized their website so readers can find them on search engines.  They’ve built massive mailing lists with millions of people subscribed by email, RSS and social networks.

Needless to say there was no shortage of haters, saying that the only reason the Huffington Post was able to grow to its gargantuan size is by taking advantage of the people who contributed without any financial gain to themselves.  If you speak to anyone who has contributed to the Huffington Post over the years though, I think you will find most of them don’t feel as if they were taken advantage of and they will continue to contribute after the buyout.  I’m sure that writers like President Obama when he was looking for support to win an election or a small business owner trying to create buzz about his company are happy with their transaction with the Post.  They would rather have a medium to reach the masses and get some positive publicity as opposed to a check for a couple hundred dollars for writing an article.

In order to run a profitable news operation these days you really don’t need a huge team of reporters.  You really don’t even need a subscription to the Associated Press anymore.  Nobody really cares about the first person who breaks big news anymore, because it’s going to be all over the web five minutes later anyway. All you need to succeed in the journalism industry this day and age is have a strong biased opinion, sprinkle a few factual details here and there and you will have an audience that either loves you or loves to hate you, but nonetheless you will have an audience.  As far as I can tell, Fox news has gotten this message.

So who is the real winner of the $315 million deal? I think everyone wins, because Arianna and her investors were able to cash out with a significant return on investment, AOL purchased a profitable news website with nearly 30 million unique monthly views, and readers will continue to enjoy thoughts and opinions of their favorite contributors. Although maybe one person got the shit end of the stick on this deal, Mike Arrington (Founder of TechCrunch, one of my favorite blogs covering start-ups and technology).  Now that Arianna is the new editor and chief of not only the Huffington Post but of TechCrunch and other sites AOL has recently acquired she will have someone new around the office to warm up her coffee every morning.

If there is one important and practical lesson to take from all of this is that a loyal following is critical.  If you have any presence online work to grow your audience by using facebook, twitter, RSS, email subscription services like GetResponse and Aweber or by any other means you can think of.  The rules of journalism have changed and if you want to survive in the industry you need to change with them.

6 thoughts on “Creating A Profitable Journalism Industry in a Digital Age”

  1. I’m a little confused by what seem like your dueling stances. On the one hand:

    “All you need to succeed in the journalism industry this day and age is have a strong biased opinion, sprinkle a few factual details here and there and you will have an audience that either loves you or loves to hate you, but nonetheless you will have an audience.”

    But on the other hand:

    “Although maybe one person got the shit end of the stick on this deal, Mike Arrington (Founder of TechCrunch, one of my favorite blogs covering start-ups and technology).”

    TechCrunch is, not even arguably, one of those opinionated sites that you’re referring to.

    I guess I’m confused because you appear to take a swipe at opinionated news sources in one breath and then endorse one of those said sources in the next. Not that I’d begrudge you conflicting opinions or anything; that just struck me as inconsistent.

    Can you clarify?

    1. The opinionated news outlets like some shows on Fox pick one side or another and defend their point of reason regardless of how little it makes sense because studies have shown that this increases ratings.

      TechCrunch by no means falls into this category, because while they have definite opinions, they are the honest opinions of their reporters/bloggers and don’t simply pick a side just to increase readership. When I read TC I learn something about start-ups and the tech industry. When I watch a strongly biased show on cable television, I learn the opinion of one person, which may not even be his true opinion, but gets paid to have that one regardless.

      Did I answer your question? Thanks for reading and leaving a comment Paul.

  2. How about just breaking stories? is that such a novel idea? Instead of bullshit echo box opinions as evidenced above, adding nothing to the story and just cherry picking facts and repackaging them.

    1. I see you didn’t like my story much… I addressed breaking stories above, but I’ll say it again since you seem to have missed it. Breaking stories are only “breaking” for a couple minutes because everyone shares and tweets them instantly.

      Think you will be very frustrated with all new media outlets because it’s not “repackaged” at all. The reason blogs are so popular now is because people can take a big news story and add their own opinion as I have above. Nonetheless, thanks for leaving a comment.

  3. Sort of.

    I agree with you on the point that stronger opinions win more ratings or page views. Where I disagree is in the blanket statement that cable news = lies, TechCrunch = truth.

    I think they’re all — cable news networks and sites like TechCrunch — lying and telling the truth. Or more accurately, I think they’re all exaggerating for the sake of ratings/page views; I just think they do it to different degrees.

    Does Glenn Beck really think the U.S. is going to turn into communist Russia (or whatever the hell he’s talking about) if we don’t vote Pres. Obama out of office in 2012? Probably not. Is Michael Arrington really that brash and opinionated? Probably not. But both people realize that if they take some nugget of opinion and exaggerate it to a certain point, they’ll achieve a greater audience than if they just presented what they actually believe, which is probably more reasoned and nuanced, and thus less instantly digestible and re-Tweet-able.

  4. Cable news doesn’t equal lies at all. I agree entirely that the stories sometimes get hyped up. In the case of political news I think people want more than just two choices Republican or Democrat. Americans have also gotten tired of people bashing one another just for the sake of higher ratings as well. Cable news is very good about tweaking their stories with the angle people want hear, so think this will change soon.

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